Women Underestimate Future Health Care Costs

The survey conducted by Harris Interactive of 1,250 Americans with at least $250,000 in household assets found women close to retirement estimate they will spend $4,624 each year on health care beyond what Medicare covers. That’s 21% less than the $5,882 men nearing retirement estimate they will spend each year on things like premiums, copayments and deductibles. However, both are way off, Nationwide noted.

A 2012 study by Fidelity found a 65-year-old couple retiring today would need $240,000 to cover medical expenses during their retirement years – and that doesn’t include long-term care costs.

According to the survey, nearly half of both women and men say they are “terrified” of what health care costs may do to their retirement plans. Yet, women respondents nearing retirement are much more likely than men respondents to say they have not estimated:

How much they will spend each year in retirement on things like premiums, copayments and deductibles (41% vs. 27% of men), and;

How much income in retirement they will have from things like Social Security, retirement accounts or pensions (21% vs. 12%).

On average, women estimate that Medicare will cover 65% of their annual health care costs. But, similar to men respondents, when asked how they came to this percentage, 85% either guessed or did not know. Only 2% said they were told this by a financial adviser.

While 65% of women have discussed their retirement with a financial adviser – of those who have, only one in 10 talked about how much they should expect to pay in health care costs apart from Medicare (compared to one in four men).

Women are also slightly more likely than men to say they are somewhat unconfident to not at all confident in their plan to live comfortably in their retirement years (46% vs. 39%).